Gains for HyDrive, Xyience Fueling Big Red

The Texas-based beverage company isn’t shying away from its namesake product, the bright and bubbly soft drink which remains its flagship item. But in recent months, the company’s long-term efforts to balance its portfolio with more better-for-you brands in on-trend categories has begun to produce tangible results. Distribution gains and new innovations from its pair of zero-calorie brands — energy drink Xyience and flavored energy water Hydrive — have added a new dimension to Big Red’s offerings, with plenty of runway still ahead.

For Xyience, the evolution has been nuanced. Since acquiring the brand in 2014, Big Red has worked to expand the audience for the line of 16 oz. canned zero-calorie energy drink beyond its origins as a subsidiary of Zuffa, a Las Vegas-based sports promotion group and parent company of mixed martial arts competition Ultimate Fighting Championship (UFC). As zero-calorie energy drinks from the category’s big players, such as Red Bull and Monster, continue to outperform at retail, Big Red SVP of marketing Thomas Oh explained how over time the line has pivoted marketing away from mixed martial arts and “softened the target” towards more mainstream consumer.

“When we bought Xyience, we wanted to soften the image in some respects, as with a zero-calorie product aligning with mixed martial arts almost seemed like a bit of a disconnect,” Oh told BevNET last week.

To broaden the message and capture older millennials — ages 27 to 37 — who Oh said are consuming more energy drinks than any other demographic, Xyience has targeted opportunities in college sports. Following a two-year integrated marketing campaign featuring ESPN College Football presenter Samantha Ponder from 2015-2016, the brand launched a new partnership with sports and lifestyle media company Barstool Sports for its “Tailgate Tour RV,” which made stops at 10 of the college football season’s biggest games for sampling activations. Xyience was also showcased in Barstool Sports’ social media channels and affiliated content, such as the podcast Pardon My Take.

The brand is now seeking to turn that growing consumer awareness into turns at retail. Earlier this month, Xyience announced an expansion into over 6,500 new convenience and grocery store locations nationwide, including placements in 7-Eleven (2,150 locations), Circle K (1,495 locations), Kwik Trip/Kwik Star (502 locations) and Food Lion (1,030 locations). Oh also indicated that Xyience will be tested in about 430 CVS store locations beginning in May, and will be introduced into around 500 Target locations this summer. Big Red’s food service division, which has primarily focused on the flagship soda line, is also working with third-party operating partners such as Compass and Sodexo to explore getting Xyience into offices and workplace accounts.

“Barstool is obviously targeted more to the millennial user who we are trying to target with the zero-calorie product,” Oh said, adding that the brand is planning a package redesign for this March that will more strongly highlight the zero-calorie, zero-sugar callouts. “We think that going more broader, more mainstream is what’s driving the energy drink category.”

With Hydrive, Big Red is taking a different approach to the energy space. While Xyience is firmly established in the male-centric energy drink space, Hydrive’s more versatile offering of hydration and functionality has given the brand a broader canvas on which to work. Last year, Big Red, which acquired Hydrive in 2012, executed a complete revamp of the line, creating a new custom bottle that Oh said communicated a more premium feel and reformulating the product for a lighter taste that skewed closer to water than juice. Most significantly, the products were reformulated to become zero-calorie. New flavors — Kiwi Melon and Grape Fusion — were also introduced earlier this month.

In contrast to Xyience’s focus on spectator sports, Hydrive has positioned its marketing to appeal to healthy and active lifestyle consumers. As the brand expands to new points of distribution in convenience and grocery in 2018, it has brought on Christen Press, a forward for the U.S. Women’s National Soccer Team and a FIFA Women’s World Cup champion, as its new brand ambassador. Oh said Hydrive has also partnered with obstacle course race series Spartan Race for sampling activations at 20 events around the country this year.

With a close eye on the millennial consumer, could Big Red begin to explore all-natural and organic versions of Hydrive and Xyience? Oh said the company was looking closely at that proposition and has had discussions with a flavor house about creating a natural version of the energy water line. He explained that while the company will continue working towards making a “cleaner” product from an ingredient standpoint, it was not prepared to make any concessions in taste at this point.

“It’s really challenging to get the taste right,” he said. “I think what we’ve done with Xyience and Hydrive is we’ve delivered a really great tasting zero-calorie product and then, as you know, once you go into organic and all natural and have to use stevia, it’s very challenging to try to get the taste up to the standard that we’ve already set with our current product.”

Even as Xyience and Hydrive grow in significance within Big Red’s brand portfolio, the company hasn’t steered away from its roots completely. In the face of declining soft drink sales and greater consumer awareness over sugar content in beverages, Oh said that Big Red has continued to outpace the carbonated soft drink category in terms of growth. He acknowledged the brand’s “cult following” for its sustained growth, while crediting Big Red’s variety of product offerings and use occasions as a source of the company’s overall strength.

“If someone’s going to be reading labels, they are probably not going to be consuming a red soda,” Oh said in reference to the difference between the Hydrive/Xyience consumer and Big Red soda enthusiast. “It is kind of fun as an organization to have these different consumer groups that we are trying to hit with what we would consider our three primary brands: Big Red, Xyience and Hydrive.”

About New Perfection Beverage Company
New Perfection Beverage Company, located in Austin, Texas, is a wholly owned subsidiary of Big Red, Inc. Big Red, Inc is among the most experienced beverage companies in North America with a history dating ba...

ABOUT XYIENCE (pronounced zi-ence)
Headquartered in Austin, Texas, XYIENCE is the leading zero calorie/sugar energy drink made with all natural flavors and colors. XYIENCE is available in eight great-tasting flavors: Cherry Lime, Mango Guava, Frost...